Q&A: FORMER DOE FOSSIL ENERGY CHIEF MCCONNELL ON THE FUTURE OF CCUS

2/15/13

The following interview with outgoing Assistant Secretary of Energy for Fossil Energy Chuck McConnell was conducted by GHG Monitor Reporter Tamar Hallerman.

TH: Why have you decided to leave the Department of Energy?

CM: I knew coming into the job that these appointments are not meant to last forever. I came with a specific purpose in mind to try to make a difference in the areas of coal, oil and natural gas. Looking back at my time at DOE, I feel like we were successful in moving much of that forward and I feel good about having made a difference, which is the reason why you take a job like this.

It’s also been in my mind for some time that I would like to get back to the private sector at some point, and it just seemed like a rather natural time with Secretary of Energy Steven Chu also announcing his departure. There will be a new team coming in, and that team will certainly have its own rhythm and support. So it’s a good time for me to get on with the rest of my life.

What do you believe you’ve been able to accomplish during your tenure as Assistant Secretary, and how does that align with the goals you had when you took the position?

My single biggest aspiration when I came in was to try to move the discussion around carbon capture and sequestration to a more dynamic, market-based one. CCS as it was originally envisioned in the middle of the last decade was tied to a carbon tax, cap-and-trade or some type of market-moving mechanism that was going to be legislated. I worked in that space and was very much a part of it. But while I was in the private sector, it became clear that without that external forcing function, the business case wasn’t there and the ability for industry to invest to move the ball forward in CCS wasn’t there.

It was really important to me to bring the concept of adding the ‘u’ to CCUS by utilizing CO2 for enhanced oil recovery, to provide that market-based mover that was going to allow us to continue to advance all of the carbon capture and sequestration technology for the purposes of environmental improvement and energy security. We have a lot of domestic oil in this country that remains in the ground and can be recovered, and I think every day it’s becoming clear that we’re going to be producing more and more oil as a country, our balance of trade is going to improve, the jobs supporting the industry will increase and the economy is going to be better for it. It cannot be just environment or just business. It must be both: thinking of sustainability as good for the environment and business.

Within the Office of Fossil Energy’s (FE) programs, do you think the concept of CCUS can stand on its own feet even when you’re gone?

The concept and the programs are well founded and grounded. The socialization aspect of the concept was a big part of what we did over the last two years, and it was a difficult conversation initially, but I think the merits of it stand on its own now. I’d like to believe that as the effort goes forward, that sensibility is recognized in the marketplace, that the people who are interested in environmental enhancements can see that CCUS with enhanced oil recovery isn’t something other than CCS practiced in geologies that are oil-bearing. We’ve also worked to ensure that people on fossil energy side of the business marketplace don’t see investment in CCUS as a drag, but an accretive way to increase the amount of domestic oil we produce in this country.

I’d like to believe that groundwork is going to sustain itself as we go forward. But there are also a lot of competing elements of the whole “all-of-the-above” technology portfolio that are out there, programs that are competing for fewer tax dollars because we’re all being asked to do more with less. But I believe the sustainability of the program will be in the fact that industry will now be able to continue to invest.

What do you feel still needs to be done going forward?

The continued quest for a lower cost of carbon capture and CO2 separation technologies through continued work with universities, industry, the National Energy Technology Laboratory (NETL) and our National Laboratory System. We cannot shy away from the fact that the transformational technology necessary for long-term sustainability for CCUS is all about finding a lower cost for CO2 separation and delivery.

We have to continue to support not just large project deployment but also the fundamental R&D, small university programs and basic early-stage development. The National Carbon Capture Center, where we take that bench-scale technology and move it to pilot- and industrial-scale demonstrations, is so fundamentally necessary. We must continue supporting the National Carbon Capture Center because we must create a low cost CO2 capture technology.

You launched an initiative last summer aimed at converging the cultures of FE headquarters and NETL. Do you think you’ve been able to accomplish that goal? 

I don’t think any work is ever completely finished. What we’ve clearly done is open our eyes as an organization to the fact that leveraging the capabilities that we have across all of FE is fundamental to a successful and healthy organization. I’d like to believe that the efforts that we’ve taken over the past two years have led us quite a ways down that road. It’s not something that’s natural, it’s something that you have to be conscious of, and you have to make purposeful steps to be certain that that the integration and leveraging of capabilities is active and healthy.

It’s not just Washington and NETL. It’s the Strategic Petroleum Reserve, the Rocky Mountain Oil Testing Center and the Northeast Oil Heating Reserve. When I came into this job, the conversation centered on what was going on in Washington. But I’d like to believe that two years later, when people think of Fossil Energy, they think about those 4,000 people in those many locations across the country leveraging and working as a unit as best we possibly are able.

Looking ahead, do you think that the days of big federal outlays for CCS and CCUS projects are over?  If so, what’s the path forward for federal support of the technology?

The vast majority of our portfolio is CCUS out of necessity. The Recovery Act was rather unique in many aspects. What it did was allow large commercial-scale deployment of first-of-a-kind technology in Fossil Energy. Some of those projects are moving along at a very rapid pace and we’ve got $3.2 billion of taxpayer money to make good use of. We’re still very encouraged that that entire portfolio continues to be healthy and move forward. That’s great.

But we also recognize that you can’t rely on the next Recovery Act for the long-term sustainability of your program. That shouldn’t be an expectation. What we’re doing now is beginning to tailor our second generation technology, R&D roadmap and ultimately the deployment of that technology more toward leveraging existing facilities. We’ve done a good job of not just fundamental R&D, but pilot demonstrations at places like the National Carbon Capture Center that industry can be confident in and be ready then to deploy and put that technology into the marketplace.

If we continue to move in that direction, we’ll have second generation technology out there by the end of this decade. That in itself will be transformational in driving the cost of carbon capture well below 50 percent of what it is today, and that’s going to be a big deal. Those pilot locations must also have access to oil-bearing geologies so the value chain is intact to enable CCUS to be realized. We have the geological market mapped, strategies being developed and a good plan for a positive outcome. Also, you continue to be mindful of the fact that natural gas power and chemical production also create CO2. Our portfolio is positioned to address that because we must.

I believe we can move this ball forward without another Recovery Act. But we need to have the continued support of the Administration to move the R&D program forward, as well as the continued support from the marketplace and the fossil community.

What’s next for your career? Are you looking to stay in the CCUS world? 

I suspect going back to Houston will get me right back into the middle of an energy community that I’ve been a part of for most of my 35-year career. I’d like to take my industry background, as well as this wonderful experience that I’ve had at DOE over the last two years, and bring that back to the industry and business community within fossil and hopefully be even more effective than before. That’s my aspiration.